Daily economic digest from Forex.ee

The EUR/USD pair consolidates its positions
today, within its tight range of 1.1730-50, however, being weighed by developments
on the political field of Germany. The Euro continues to receive negative
pressure from latest headlines, saying that A.Merkel’s CDU/CSU party failed coalition
talks, and now is preparing for re-elections. On the other side, risk negative environment
supports the euro as funding currency on the back of ongoing political conflict
between the US and N.Korea. Looking ahead, today we have quite light data calendar,
with only US existing home sales lined up for release, so any further German
political developments and US dollar price dynamics will remain key navigators
for the pair during this trading session.

The GBP/USD pair extends its bullish rally,
remaining positive for the sixth consecutive session. The pound continues to
keep its positions in the area of 3-week highs in the pair with its US peer
amid yesterday’s developments regarding Brexit negotiations. On Monday, UK PM
T.May finally got Cabinet support and now the UK is ready to double its EU
divorce bill offer. On the other side, renewed risk-off trend, triggered by
latest comments of the US President D.Trump, calling N.Korea as a state sponsor
of terrorism, may limit pair’s further upside. Now all eyes remain glued to the
BoE inflation report hearings, which could provide the market with detailed
information regarding further BoE’s outlook on inflation. Moreover, the US
economy will publish today the existing home sales report, which will grab
investors’ attention in the day ahead.

The AUD/USD pair extends its downside trend
for the fifth session in a row on the back of dovish RBA minutes. Earlier today,
the RBA published its protocols from the last meeting, which didn’t provide any
surprise to the market. RBA members showed concerns about consumption growth
and wage pressures that accelerated bearish dynamics of the Aussie. Moreover,
Bank’s authorities once again stressed the risks associated with higher
positions of the Australian dollar. On the other hand, subdue dynamics of the
US dollar, seen this morning, could bring some relief to the pair in the
session ahead. Now all investors’ attention shifts towards the speech of the
RBA Governor Philip Lowe, who might lend additional short-term impetus the
pair, while data from the US housing market will keep traders busy during the
NA session.

Amazing, Bitcoin continues to surprise markets,
having once again refreshed its all-time highs in the pair with its US
counterpart at 8300.30 spot. The BTC/USD pair showed quite volatile dynamics
for the last month, dropping below the level of 5500 in the first half of this
month and then rising to the area of 8000. Recall, recent drawdown of Bitcoin
is mostly related to the cancelation of SegWit2x due to lack of community
support. However, seems that markets have passed over this news and the cryptocurrency
has returned to the trend. By the moment of writing, the BTC/USD pair was
trading at 8150.00 level, having slightly corrected lower from its record-breaking
highs, while Bitcoin total capitalization was 134 billion US dollar, according
to the data, available at coinmarketcap.com.

The main events of the day:

UK
Inflation Report Hearings – 12.00 (GMT +2)

US
Existing Home Sales – 17.00 (GMT +2)

Support and resistance levels for
the major currency pairs:

EURUSDS.
1.1666 R. 1.1840

USDJPYS. 111.57 R. 113.23

GBPUSDS.
1.3139 R. 1.3325

USDCHFS.
0.9857 R. 0.9975

AUDUSDS.
0.7525 R. 0.7585

NZDUSDS.
0.6768 R. 0.6860

USDCADS.
1.2732 R. 1.2864

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